Session Law

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to regulate forthwith the mortgage industry, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same as follows:

SECTION 1. Section 1 of chapter 255E of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by inserting after the definition of “Mortgage loan” the following definition:-

“Multi-state licensing system”, a system involving 1 or more states, the District of Columbia, or the Commonwealth of Puerto Rico for the sharing of regulatory information and the licensing and application processes, by electronic or other means, for mortgage lenders and mortgage brokers.

SECTION 2. Said chapter 255E is hereby further amended by striking out section 3, as so appearing, and inserting in place thereof the following section:-

Section 3. The application for a license shall be in a form prescribed by the commissioner and shall contain the name and address or addresses where the business of the applicant is located and if the applicant is a partnership, association, corporation, or other form of business organization, the names and addresses of each member, director, principal officer thereof, and any individual acting as a manager of an office location. Such application shall also include a description of the activities of the applicant, in such detail and for such periods as the commissioner may require, as well as such further information as the commissioner may require. The commissioner may require a background investigation of each applicant for a mortgage broker or mortgage lender license by means of fingerprint checks by the criminal history systems board pursuant to section 172 of chapter 6, and the Federal Bureau of Investigation for state and national criminal history record checks. If the applicant is a partnership, association, corporation or other form of business organization, the commissioner may require such background investigation by means of fingerprint checks on each member, director, principal officer of such applicant, and any individual acting as a manager of an office location. Receipt of criminal history record information by a private entity shall be prohibited. Each application for a license shall be accompanied by an investigation fee. Investigation and license fees shall be determined annually by the commissioner of administration under section 3B of chapter 7.

The commissioner may participate in a multi-state licensing system for mortgage lenders and mortgage brokers. The commissioner may establish requirements for participation by an applicant in a multi-state licensing system which may vary from the provisions set out in sections 3 and 5. The applicant shall pay directly to such multi-state licensing system any additional fee relating to participation in such multi-state licensing system. The commissioner shall ensure that the multi-state licensing system adopts appropriate privacy, data security and security breach notification policies. Upon written request, the commissioner shall make available within 30 days, a copy of the contract between the division and the multi-state licensing system that satisfies this section.

SECTION 3. Section 5 of said chapter 255E, as so appearing, is hereby amended by striking out the first 6 sentences and inserting in place thereof the following 6 sentences:- Each license shall state the address at which the business is to be conducted and shall state the name of the licensee. If a licensee intends to carry on such business at any place in addition to the address on the license, he shall so notify the commissioner, in writing, at least 30 days prior thereto, and he shall pay a fee for such additional location at a reasonable cost as determined by the commissioner. Such notice shall contain the address of any such additional location and such other information as the commissioner may require; provided, however, that any such business shall at all times be conducted in the name of the licensee as it appears on the license. A copy of such license shall be prominently posted in each place of business of the licensee. Such copies for places of business at addresses other than that appearing on the license may be obtained at a reasonable cost, as determined by the commissioner. Such license shall not be transferable or assignable and shall expire annually on a date determined by the commissioner.

SECTION 4. Section 8 of said chapter 255E, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- Each licensee shall annually, on or before a date determined by the commissioner, file a report with the commissioner containing such information as said commissioner may require concerning the business and operations conducted by the licensee in the commonwealth during the preceding calendar year.

SECTION 5. Said section 8 of said chapter 255E, as so appearing, is hereby further amended by adding the following paragraph:-

The commissioner shall preserve a full record of each such examination of a licensee, including a statement of its condition. All records of investigation and reports of examination by the commissioner, including work papers, information derived from such reports or in response to such reports, and any copies thereof in the possession of any licensee under the supervision of the commissioner, shall be confidential and privileged communications, shall not be subject to subpoena and shall not be a public record under clause Twenty-sixth of section 7 of chapter 4. For the purpose of this paragraph, records of investigation and reports of examinations shall include records of investigation and reports of examinations conducted by any bank regulatory agency of the federal government and any other state, and of any foreign government which are considered confidential by such agency or foreign government and which are in possession of the commissioner. In any proceeding before a court, the court may issue a protective order to seal the record protecting the confidentiality of any such record, other than any such record on file with the court or filed in connection with the court proceeding, and the court may exclude the public from any portion of a proceeding at which any such record may be disclosed. Copies of such reports of examination shall be furnished to a licensee for its use only and shall not be exhibited to any other person, organization or agency without prior written approval by the commissioner. The commissioner may, in his discretion, furnish to regulatory agencies of the federal government, of other states, or of foreign countries and any law enforcement agency, such information, reports, inspections and statements relating to the licensees under his supervision.

SECTION 6. Notwithstanding any general or special law to the contrary, the commissioner of banks shall file with the chairs of the joint committee on financial services and the chairs of the house and senate committees on ways and means an annual report, including financial statements, of the conference of state bank supervisors state regulatory registry, limited liability company relative to the multi-state licensing system. The commissioner shall file said report within 10 days of receipt of the report from the conference of state bank supervisors state regulatory registry, limited liability company. Said report shall be initially filed following the first full fiscal year after the effective date of this act and thereafter for the 2 following years..